Your MoMo sales are not your profit: how to split business money

Use a GHS 500 sale to learn what belongs to stock, expenses, owner withdrawals and business reserves before you spend a customer's payment.

Before we begin

That MoMo alert from a customer is not automatically your profit.

You sell an item, your phone shows GHS 500 received, and suddenly you start planning what to buy. But some of that payment needs to replace the item. Some must cover the cost of making the sale. Some may be needed for bills that have not arrived yet.

This lesson gives you a routine for handling each payment without accidentally spending the money your business needs to keep trading. We will use fictional Ghanaian examples and distinguish sales, profit and available cash.

Step 1: Understand what the MoMo alert tells you

The alert tells you that money has arrived. It does not explain what the money represents or how much you can take home.

Record what the payment is for. If you already recorded a credit sale when you supplied the goods, receiving payment later does not create a second sale.

Sales revenue measures what the business earns from sales. Profit measures revenue less the relevant expenses for the period. Cash flow tracks money moving in and out. These figures can differ. For the general distinction, see this explanation of profit and loss statements.

Step 2: Follow one GHS 500 sale

Abena sells bags through WhatsApp in Accra. A customer pays GHS 500 for one bag. For this classroom example, assume no tax, refunds, financing costs or other charges; all listed costs are complete for the transaction.

500 − 300 − 50 = 150.

The GHS 150 is a contribution towards other business expenses and eventual profit. It is not automatically Abena's spending money.

If GHS 50 is a reasonable estimated share of her period's other operating expenses, this sale would leave GHS 100 before tax after that allocation. The estimate helps her plan; her actual period-end records determine the final result.

Cost classifications can differ: delivery, for example, may appear separately from cost of goods sold in the accounts. Whichever layout you use, include each cost once and make clear what your subtotal excludes.

Step 3: Give the payment four jobs

The four buckets are a cash-planning habit, not a replacement for accounting records. You can track them in a notebook or spreadsheet; you do not need four paid accounts.

Bucket 1: Replace the stock or fund the next job

Abena sets aside GHS 300 to replace the bag, assuming the supplier's price has not changed. A caterer might need money for ingredients; a printer might need paper and ink.

Check today's replacement price. If the next bag will cost GHS 330, she needs another GHS 30 of working cash even though the bag just sold cost GHS 300. Historical profit and future restocking needs are different calculations.

Bucket 2: Cover business expenses

This includes the GHS 50 delivery and packaging cost, plus a realistic allowance for shared expenses such as business data, rent, utilities and staff costs. Record any actual transaction fees too.

For this example, Abena allocates GHS 100 in total: GHS 50 for the order and GHS 50 towards shared expenses. Do not add the order's GHS 50 again elsewhere.

Bucket 3: Decide what you can pay yourself

After protecting stock money and expenses, Abena tentatively chooses GHS 60 for personal use. She checks upcoming commitments before transferring it.

For a sole trader, taking cash for personal use is an owner's drawing, not an operating expense that reduces profit. A company's salary or distribution arrangements are different; keep those properly documented. The CPA small-business guide distinguishes owner drawings and financing cash movements from operating results.

Bucket 4: Leave a reserve in the business

The remaining GHS 40 stays as cash for the business. It may help with slower weeks, unexpected costs or future purchases.

These amounts are illustrative, not recommended percentages. With the example's assumptions, profit before tax is GHS 100; the owner's drawing and retained cash divide that amount. Calling GHS 40 the profit would confuse profit with cash left after a withdrawal.

In real life, tax obligations, unpaid suppliers, loan payments and other commitments may leave less available for the owner. A loan principal repayment uses cash even though it is not an operating expense in the profit calculation.

Step 4: Avoid counting the same money twice

Setting aside GHS 300 is a plan or an internal transfer. Paying the supplier later is the actual purchase. They are not two GHS 300 expenses.

Also distinguish stock purchased from stock sold. Replacement stock that remains unsold is inventory; it should not all be charged against today's profit merely because you paid for it today. The cost of the bag already sold belongs in the calculation for that sale.

Likewise, moving GHS 40 to a reserve does not itself create an expense or prove that you made GHS 40 profit. Buckets organise cash; records establish profit.

Step 5: See how a busy business runs out of cash

Suppose Abena makes ten identical sales in a week:

Assume no opening spare cash, no customer debts and no other commitments. If she takes GHS 2,000 for personal use because sales looked strong, she has taken GHS 1,000 more than the week's profit.

That extra withdrawal must come from somewhere. It may leave her unable to replace all the bags or cover the bills. Sales can look healthy while the cash needed to continue trading disappears.

Step 6: Keep a simple daily record

Start with these columns. Keep the receipt, invoice or transaction reference alongside each entry.

This is a cash record, not a complete profit statement. Link it to stock costs and a separate list of credit sales, unpaid bills and advance payments. Show internal transfers clearly so you do not count them as revenue or expenses.

Each evening, calculate:

Opening balance + receipts − payments = expected closing balance.

Compare that with your actual MoMo, bank and cash balances. Check each account separately, including transfers between them. Investigate differences rather than changing the records to force a match.

Good records include small cash purchases too, not just large electronic transactions. See general record-keeping guidance. The linked international sources support accounting concepts, not Ghanaian tax rules.

Step 7: Make paying yourself a planned decision

Choose a regular review day instead of withdrawing something whenever your phone beeps. Before taking money out, check:

• Have the goods or services been supplied, or is this an advance payment?
• What stock or materials must be replaced, at what current cost?
• Which suppliers, staff and other bills need paying soon?
• What provision is needed for applicable taxes, refunds and debt payments?
• How much cash should remain for the next trading period?

Keep personal spending out of the business transaction record except as a clearly labelled owner withdrawal. If the business cannot sustainably support your needs, review prices, costs and sales volume instead of quietly taking stock money.

Your next-sale exercise

For your next sale, write down the selling price, cost of the item or service, order-specific expenses and the amount remaining. Then check shared expenses and upcoming obligations before deciding on personal pay and reserves.

Use the MINT business profit calculator to explore your figures. For a deeper explanation of margins, read Revenue vs profit. If you sell physical products, use How to track your stock and its free inventory tracker to support your stock records.

When a payment arrives, ask what the money needs to do before asking what you can buy.

Figures as of 22 October 2026; fictional Ghanaian business examples, not tax or payment-provider rates. Sources: Business.govt.nz: understanding profit and loss statements (general accounting concepts), Business.gov.au: record keeping (general business guidance), CPA Australia: Achieving Financial Success, small business guide (general accounting concepts)

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